(a) At least ninety-five per cent of a financial guaranty insurance corporation‘s outstanding total net liability on the kinds of obligations enumerated in subdivisions (1) to (3), inclusive, of subsection (b) of § 38a-92g shall be investment grade.

Terms Used In Connecticut General Statutes 38a-92i

  • Commissioner: means the Insurance Commissioner. See Connecticut General Statutes 38a-1
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Insurance: means any agreement to pay a sum of money, provide services or any other thing of value on the happening of a particular event or contingency or to provide indemnity for loss in respect to a specified subject by specified perils in return for a consideration. See Connecticut General Statutes 38a-1
  • Insured: means a person to whom or for whose benefit an insurer makes a promise in an insurance policy. See Connecticut General Statutes 38a-1
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.

(b) The financial guaranty insurance corporation shall at all times maintain capital, surplus and contingency reserve in the aggregate no less than the sum of the following:

(1) 0.3333 per cent of the total net liability under guaranties of municipal bonds and utility first mortgage obligations;

(2) 0.6666 per cent of the total net liability under guaranties of investment grade asset-backed securities;

(3) 1.0 per cent of the total net liability under guaranties secured by collateral or having a term of seven years or less of: (A) Investment grade industrial development bonds, and (B) other investment grade obligations;

(4) 1.5 per cent of the total net liability under guaranties of other investment grade obligations;

(5) 2.0 per cent of the total net liability under guaranties of: (A) Noninvestment grade consumer debt obligations, and (B) noninvestment grade asset-backed securities;

(6) 3.0 per cent of the total net liability under guaranties of noninvestment grade obligations secured by first mortgages on commercial real estate and having loan-to-value ratios of eighty per cent or less;

(7) 5.0 per cent of the total net liability under guaranties of other noninvestment grade obligations;

(8) If the amount of collateral required by subdivision (3) of this subsection is no longer maintained, that proportion of the obligation insured which is not so collateralized shall be subject to the aggregate limits specified in subdivision (4) of this subsection; and

(9) Additional surplus determined by the commissioner to be adequate to support the writing of surety insurance if the financial guaranty insurance corporation has been licensed to transact surety insurance.

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